§ 26.1-06.1-26 — Fraudulent transfer after petition

North Dakota § 26.1-06.1-26

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-06.1: Insurance Company Rehabilitation and Liquidation

Text

1. After a petition for rehabilitation or liquidation has been filed, a transfer of any of the
real property of the insurer made to a person acting in good faith is valid against the
receiver if made for a present fair equivalent value. If the transfer is not made for a
present fair equivalent value, then the transfer is valid to the extent of the present
consideration actually paid therefor, for which amount the transferee shall have a lien
on the property so transferred. The commencement of a proceeding in rehabilitation or
liquidation is constructive notice upon the recording of a copy of the petition for or
order of rehabilitation or liquidation with the recorder in the county where any real
property in question is located. The exercise by a court of the United States or any
state or jurisdiction to authorize or effect a judicial sale of real property of the insurer
within any county in any state may not be impaired by the pendency of such a
proceeding unless the copy is recorded in the county prior to the consummation of the
judicial sale.
2. After a petition for rehabilitation or liquidation has been filed and before either the
receiver takes possession of the property of the insurer or an order of rehabilitation or
liquidation is granted:
a. A transfer of any of the property of the insurer, other than real property, made to a
person acting in good faith is valid against the receiver if made for a present fair
equivalent value. If the transfer is not made for a present fair equivalent value,
then the transfer is valid to the extent of the present consideration actually paid
therefor, for which amount the transferee shall have a lien on the property so
transferred.
b. A person indebted to the insurer or holding property of the insurer may, if acting in
good faith, pay the indebtedness or deliver the property, or any part thereof, to
the insurer or upon the insurer's order, with the same effect as if the petition were
not pending.
c. A person having actual knowledge of the pending rehabilitation or liquidation must
be deemed not to act in good faith.
d. A person asserting the validity of a transfer under this section shall have the
burden of proof. Except as elsewhere provided in this section, no transfer by or
on behalf of the insurer after the date of the petition for liquidation by any person
other than the liquidator is valid against the liquidator.

3. Every person receiving any property from the insurer or any benefit thereof which is a
fraudulent transfer under subsection 1 is personally liable therefor and is bound to
account to the liquidator.
4. Nothing in this chapter impairs the negotiability of currency or negotiable instruments.